Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
June 1, 1993
| Kitchener District Office |
Head Office |
| Financial Industries Division |
Ghislain Martineau |
| |
(613) 957-8962 |
Attention: George Pottage
XXXXXXXXXX
Enhanced Retirement Program
Please find enclosed a copy of a program developed by XXXXXXXXXX in order to fund retirement benefits provided by Canadian-controlled private corporations. The correspondance is self explanatory regarding the program.
It is our view that the acquisition by an employer of an interest in a life insurance policy under that program could be subject to the provisions of subsection 207.6(2) of the Act. In such a case, payments made under the life insurance policy would be treated as distributions by a retirement compensation arrangement by virtue of paragraph 207.6(2)(d) of the Act. Furthermore, an employer would be required to include in income from a business or property the amounts received during a year from a retirement compensation program by virtue of paragraph 12(1)(n.3) of the Act if an amount contributed by the employer to such program was deductible under paragraph 20(1)(r) of the Act.
Our comments are general since we did not have the opportunity to examine a life insurance policy purchased by a corporation under that program. You can contact us if you need more assistance regarding the fiscal consequences of that program after having examined a completed transaction.
Section Chief Section de financement, location et des régimes Financial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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